17 January 2019
Gilts and Bullion
A letter to the Editors
As most bullion depositories offer the facility of lending out existing holdings to speculators in return for a fixed/interest charge payable to the bullion owner, Gold need no longer be a non yielding asset class.
Frank’s observation about the relative good value of TBills vs Gilts may be a reflection of the distortion in the FX Cable rate, which heavily influenced by the Brexit uncertainty, has hovered around the $1.2 -$1.3 range for so long that it can easily appear to be the norm. At the $1.50 -$1.70 range (which most would argue is its more traditional bailiwick) the 20 year currency risk would be acceptable, but then the economics would not work.